In one line: Costco caps the markup on what it sells at about 14–15% over cost, so once the warehouses are paid for, the goods earn very little. About half of its operating income is the membership fee people pay to shop there, and they keep paying because they
In one line: TSMC designs no chips of its own. It sells wafers, and it holds its price because at the leading edge almost no one else can build them at a usable yield. Watch the gross margin, and what the next generation of fabs costs to build. At a
In one line: Nvidia sells GPUs, but what protects its profit is CUDA — the software lock-in that makes them hard to leave. Watch the gross margin, not the headline revenue. At a glance * Driver: pricing power, protected by the CUDA software lock-in * The one number: gross margin (Q2
The primer — start here. What a company sells is almost never what it earns on. Once you can see that gap, the business world stops looking like a thousand separate puzzles and starts to look like a handful of shapes that keep repeating. This is the lens every piece here